The world faces huge challenges if we are to feed our ever-growing population. At the same time, food retailers are confronted with cultural, demographic and technological change on an unprecedented scale.

What steps can they take to address the trends they see around them? And how should they seize the many opportunities this emerging landscape presents?

Food retail is being impacted by three important megatrends: the connected nature of the world; changing demographics and the huge power of millennials; and the massive challenge of sustainability.

Some five billion consumers are connected via smartphones and tablets to around 50 billion devices, sensors and light points. People born after 1980 – the so-called ‘millennial’ generation – are now the dominant force in shopping. And, in recent years, retailers have been under increasing pressure to show commitment to the environment and sustainability. Simple steps, such as a switch to LED lighting, can produce energy savings of up to 50%.

Responding to big changes

The fresh food movement is certainly having an impact on the market. As Parik Chopra – Business Segment Leader, Retail & Hospitality, at Philips Lighting – puts it: “Food is getting more fresh, more local, more organic.”

There’s increasingly a move towards sustainable production, with people taking an interest in how their food is sourced. The small, landlocked state of Sikkim – located in North-Eastern India – went organic in recent years, for example. Production per square meter remains the same, but earnings have doubled, which is great news for the farmers.

Although 80% of the world soybean, cotton and corn crops are now genetically modifi­ed, there is a counter trend towards GM-free food. There is certainly money to be made in this market, which is already worth $500 billion and is growing at a rate of 15%. Evidence also shows that millennials are prepared to pay a premium if they believe the nutritional value of the food they consume is superior.

Food retail is being impacted by three important megatrends: the connected nature of the world, changing demographics and sustainability".

Parik Chopra, Business Segment Leader,

Retail & Hospitality, Philips Lighting

Inventive retail

Freshly cooked food is becoming something of a fashion. In a world in which people are increasingly shopping online, it’s also a great point of differentiation for retail stores.

Peapod in Chicago has allowed shoppers to order fresh food from a digital display wall on their way to work. It then gets shipped directly to their home. This is the world of ‘omnichannel’ demand side, where people will shop in a variety of different ways – many of them involving digital technology.

The supply side is becoming more digital too, with the possibility of using RFI tags on food which measure humidity, temperature and carbon dioxide. “Then you can measure, with data, and you can ­find out the anomalies in the value chain – why these products don’t even make it to the store,” says Parik Chopra. “So there’s a huge opportunity to look at IoT propositions in the area of the supply chain.”

The environmental challenge

Food produced today represents around 10 trillion kilocalories, but this will need become 16 trillion by 2050, if we are to feed the world population. At that point, a staggering 70% of carbon dioxide produced will come from food production.

Wastage is therefore a huge issue. 25% of today’s food supply goes to waste – half of it in the production space and supply chain, often in the developing world.

The role of lighting

Effective horticulture lighting can make food production more efficient and is important for the growth of sustainable city farming. Energy-efficient LED lighting in farms and warehouses can reduce power use by as much as 50%.

We use lighting to make retail stores more of a destination for consumers who may otherwise be attracted by online shopping. Meanwhile, our programmable LEDs and controls allow flexibility over the lighting in store, helping retailers to change the ambience for specific events.

"What's more, a good-quality light spectrum can help to avoid discoloration of foods such as meat and cheese, helping to extend its shelf life by 20 to 30%. And it's possible to make a wider range of food, including fruit, look more appetizing to shoppers."

Last, but by no means least, lighting is being used for indoor positioning in stores which is far more accurate than GPS. As a result, retailers can pro­le shoppers better, help them ­find their way to products and send them targeted messages and offers to help with the marketing process.

It’s a world of innovation from plough to plate.

In the future, we also see that the lighting grid can act as a central nervous system for retail. One of the examples is in indoor positioning.”

Parik Chopra, Business Segment Leader,

Retail & Hospitality, Philips Lighting

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